Chapter 2 - Federal Legislation Flashcards
The Canada Revenue Agency (CRA) is a federal government agency that manages the following business lines for the federal government _______________
Tax Services and Benefit Programs
From this mission comes the CRA’s mandate to:
- collect revenues and administer tax laws for the federal government and most provinces and territories
- deliver various social and economic benefit incentive programs to Canadians
The CRA tracks the success of the first part of its mandate by measuring compliance in the following areas:
- Filling
- Registration
- Remittance
- Reporting
The CRA’s program responsibilities that are specifically related to payroll include the administration of:
- The Canada Pension Plan (CPP) (shared responsibility with Employment and Social Development Canada and Service Canada)
- Employment Insurance (EI) (shared responsibility with Employment and Social Development Canada and Service Canada)
- Income Tax
The CRA’s goal is to have over 90% of individual and corporate tax filers pay their taxes on time
Remittance
The CRA’s goal is to have over 90% of individual and corporate income tax and registered business goods and services tax/harmonized sales tax (GST/HST) returns filed on time.
Filling
The CRA measures its success in this area by ensuring that the majority of all known businesses are registered for various programs, including corporate income tax, GST/HST, payroll deductions, and import/export accounts.
Registration
The CRA measures reporting compliance through the information it receives on tax documents, such as the T4 and T4A information slips
Reporting
Are the first deductions to be withheld from an employee’s gross pay
Statutory deductions
What are the statutory deductions?
CPP contributions, EI premiums and income tax deductions
Under the Canada Pension Plan Act and the Employment Insurance Act, the CRA is responsible for determining:
- whether or not an individual’s employment is pensionable under the Canada Pension Plan Act or insurable under the Employment Insurance Act
- the establishment of annual maximum pensionable earnings
- the types of earnings that are considered pensionable or insurable
- how many hours an insured person has in insurable employment
- the recovery of any debts owed as a result of an overpayment of Canada Pension Plan, Employment Insurance, or Old Age Security benefits
social insurance program legislated under the federal Canada Pension Plan Act, designed to provide protection in the form of benefits to contributors and their families against loss of income due to retirement.
The Canada Pension Plan
In addition to retirement pension benefits, the plan provides supplementary benefits in the form of:
- surviving spouse pensions
- disability benefits
- benefits for orphans and children of disabled contributors
- death benefits payable upon the death of a contributor
TRUE OR FALSE: The employer matches the employee’s CPP contributions dollar for dollar
TRUE
TRUE OR FALSE: Although there is no legislated priority amongst statutory deductions, it is common practice that CPP contributions are the first statutory deductions withheld from an employee’s gross pay.
TRUE
The CRA’s responsibility for the Employment Insurance program are ________________
collection of employee and employer premiums and makes decisions about which types of remuneration are considered insurable and, therefore, subject to EI premiums
The employer’s portion is ___ times the employee’s portion unless the employer qualifies for a lower rate under the EI premium reduction program
1.4
TRUE OR FALSE: All employers are required by law to deduct EI premiums from the insurable earnings paid to their employees and remit these deductions, along with the employer’s portion, to the CRA.
TRUE
are the second statutory deduction to be withheld from an employee’s pay
EI premiums
TRUE OR FALSE: Employers are also required to track the employee’s insurable earnings and insurable hours by pay period for reporting purposes, such as completing the Record of Employment for a terminated or inactive employee.
TRUE
TRUE OR FALSE: All Canadian provinces/territories, except Québec, have entered into tax collection agreements with the federal government.
TRUE
An employer who remits withholdings or deductions late is subject to the following penalties:
- 3% will be applied to remittances that are 1 to 3 days late
- 5% for remittances that are 4 or 5 days late
- 7% for remittances that are 6 or 7 days late
- 10% for remittances that are 8 or more days late
TRUE OR FALSE: Québec collects its own provincial income tax. There are two separate income tax deductions withheld from Québec employees — one for federal income tax and the other for Québec provincial income tax.
TRUE
TRUE OR FALSE: As the federal government collects both the federal and the provincial/territorial portions of tax from all employees working in a province/territory other than Québec, the two tax withholdings, federal and provincial/territorial, are combined into one deduction amount.
TRUE
TRUE OR FALSE: Québec employees will see ‘Federal Income Tax’ and ‘Québec Income Tax’ listed separately on their pay statements. RQ is discussed extensively in a later chapter.
TRUE
TRUE OR FALSE: As a payroll professional, you need to have a clear understanding of how and when to make the required deductions and remittances to avoid these penalties and interest charges.
TRUE
collects the provincial income tax for the province of Québec
Revenu Québec
All monies deducted on behalf of the Canada Revenue Agency are considered to be held ______________
“in trust” for the Receiver General.
a department of the Government of Canada, is committed to building a stronger and more competitive Canada by supporting Canadians in making choices that help them live productive and rewarding lives and improve their quality of life.
Employment and Social Development Canada (ESDC)
Responsibilities of ESDC
- develops policies that make Canada a society in which all can use their talents, skills and resources to participate in learning, working and their community
- creates programs and support initiatives that help Canadians move through life’s transitions—from families with children to seniors, from school to work, from one job to another, from unemployment to employment, from the workforce to retirement
- creates better outcomes for Canadians through service excellence with Service Canada and other partners
ESDC specific program responsibilities include:
- Canada Pension Plan and Old Age Security
- Employment Insurance
- Employment Programs
- Youth Employment Strategies
- Canada Education Savings Program
- Canada Student Loans and Grants
ESDC is responsible for matters relating to:
- amending the regulations made under the Canada Pension Plan and the Employment Insurance Act
- keeping records of each individual’s CPP contributions and pensionable earnings
- the establishment of annual maximum insurable earnings
- the administration of provisions related to Wage Loss plans
- the administration of provisions regarding Job Creation programs
Most of today’s seniors receive income from Canada’s public pensions. Basic financial support is also available to survivors, people who become too disabled to work, and their children. These pensions and benefits are delivered through _____________
the Canada Pension Plan (CPP) and Old Age Security (OAS) programs
The amount of CPP benefits is ________________
based on an individual’s CPP contributions
TRUE OR FALSE: Employees between the ages of 18 to 70 years old make contributions that are calculated on their annual pensionable earnings between a minimum and a maximum amount. The minimum amount is frozen at $3,500, while the maximum pensionable earnings are set each January based on increases in the average wage in Canada.
TRUE
The program with the greatest impact on payroll. This program provides temporary financial assistance for unemployed Canadians while they look for work or upgrade their skills. It also provides coverage for Canadians who are sick, pregnant or caring for a newborn or adopted child.
Employment Insurance (EI)
The agency integrates services from several federal departments to form a service delivery network .
Service Canada
Some of Service Canada’s program responsibilities include:
- the issuance of Social Insurance Numbers (SIN) and the protection and security of SIN information
- the delivery of services to employers, including Record of Employment on the Web
- the administration of Employment Insurance programs to individuals, including regular, illness, pregnancy/parental, critically ill or injured person and compassionate care benefits
- the administration of the Employment Insurance Premium Reduction program, including granting qualified employers a reduced Employment Insurance premium rate
- the administration of Canada Pension Plan benefits, including retirement, disability, survivor, children’s and death benefits
- the administration of benefits for seniors, including the Old Age Security Program and the Guaranteed Income Supplement
Serves as the government’s operational arm
Service Canada
makes the rules for the various programs
Employment and Social Development Canada (ESDC)
delivers the programs
Service Canada
operates as the policy-making body
Employment and Social Development Canada (ESDC)
The biggest impact Service Canada has on payroll is through the _______________
administration of the Record of Employment program and the Social Insurance Number program
Under the Employment Insurance Act, every person who works in Canada is required to have __________________
Social Insurance Number
According to the Employment Insurance Regulations, which came into force on April 30, 2013, employees are required by law to provide their SIN to their employer within_____ days after hire.
3 days
TRUE OR FALSE: As a best practice, it is recommended that employers correctly identify employees with the help of other valid forms of identification (e.g. driver’s license, passport) before finalizing their employment documents.
TRUE
Social Insurance Numbers beginning with a “9” (commonly called 900-series) are issued to individuals who are __________________
neither Canadian citizens nor permanent residents but need a SIN for employment purposes
TRUE OR FALSE: An employer must keep records of their efforts to obtain a SIN from an employee. In situations where a SIN is not collected, the employer may be penalized $100 for each SIN not obtained if they cannot demonstrate they made a reasonable effort to obtain it.
TRUE
TRUE OR FALSE: Employees who are in pensionable or insurable employment also have to give the employer their SIN within three days of starting to work, and they can be penalized $100 for each time they don’t provide it.
TRUE
Produces statistics that help Canadians better understand their country—its population, resources, economy, society and culture
Statistics Canada
TRUE OR FALSE: In Canada, providing statistics is a federal responsibility.
TRUE
Committed to protecting the confidentiality of all information entrusted to them and ensuring that the information delivered is timely and relevant to Canadians
Statistics Canada
The Canadian government based its privacy provisions in its legislation for the protection of personal information on a set of guidelines called _______________
the Ten Privacy Principles
________ has applied to federally regulated organizations such as banks, telecommunications and transportation companies since January 2001
The Personal Information Protection and Electronic Documents Act (PIPEDA)
TRUE OR FALSE: Express consent means the employee provides their consent either verbally (in which case when and how the consent was received should be documented) or in writing.
TRUE
_______ means the employee is considered to have consented indirectly.
Implied consent
TRUE OR FALSE: The employer does not need to obtain the employee’s permission to provide personal information where legislation provides federal government agencies such as the Canada Revenue Agency, Employment and Social Development Canada, Service Canada and provincial/territorial Ministries of Labour with the right to request personal employee information to administer programs or benefits, or in the case of an audit.
TRUE
TRUE OR FALSE: Other than an employer’s obligation to report an employee’s Social Insurance Number to the Canada Revenue Agency, Employment and Social Development Canada, Service Canada or Revenu Québec, an employer may not communicate the number to a third party without the employee’s specific consent to do so.
TRUE
implemented by the Office of the Superintendent of Financial Institutions
The Pension Benefits Standards Act
outlines certain criteria that must be met within pension plans, and the areas that primarily impact payroll are eligibility and membership requirements and contribution requirements
The Pension Benefits Standards Act
administer the principle that all individuals should have an equal opportunity with others to make for themselves the lives that they are able and wish to have
Canadian Human Rights Act
The Canadian Human Rights Commission oversees both the _____________
human rights legislation and the Employment Equity Act.
ensure employment equity in the workplace so that no one is denied an employment opportunity or benefit for reasons unrelated to ability
Employment Equity Act
The act addresses the need to correct the disadvantages in employment experienced by the four designated groups:
- women
- Aboriginal peoples
- persons with disabilities
- members of visible minorities
Individuals have a right to have their needs accommodated without being hindered in or prevented from doing so by any discriminatory practices, specified as those based on:
- race
- national or ethnic origin
- colour
- religion
- age
- sex
- sexual orientation
- gender identity or expression
- marital status
- family status
- genetic characteristics
- disability
- a conviction for an offence for which a pardon has been granted or in respect of which a record suspension has been ordered
The PBSA outlines certain criteria that must be met within pension plans; the areas that primarily impact payroll are:
- eligibility and membership requirements
- contribution requirements
